Paulson to vote against MetroPCS/T-Mobile USA deal

NEW YORK, Feb 28 (Reuters) - Paulson & Co, the largestholder of MetroPCS Communications Inc stock, said onThursday it intends to vote against the wireless serviceprovider's proposed merger with T-Mobile USA, a unit of DeutscheTelekom.

Paulson, an owner of 36.3 million shares or 9.9 percent ofMetroPCS stock, is following in the footsteps of anothershareholder, P. Schoenfeld Asset Management LP (PSAM). PSAM,whose holdings represented 1.66 percent of MetroPCS shares atyear end, is leading a proxy battle against the merger.

Paulson said the merged company would have "too much debt attoo high an interest rate to be competitive."

It said it believes MetroPCS is worth more as a stand-alonecompany as it will be free to pursue its successful stand-alonestrategy while seeking higher value strategic transactions.

MetroPCS agreed to merge with T-Mobile USA in October, in areverse merger deal that would leave Deutsche Telekom with a 74percent stake in the combined company. As part of the dealMetroPCS will declare a 1-for-2 reverse stock split and pay $1.5billion in cash to its shareholders.